Millions wiped off value of Capita outsourcing deal with English councils amid 'further contract variation agreement'

Capita, the outsourcing provider held dear to the hearts of Reg readers everywhere, is seeing millions of pounds lopped off the value of its contract with a gaggle of small councils in the middle of England. A tender document published recently confirms the outsourcing provider has had £14m removed from the deal with a shared- …

[Anonymous Coward]

I don't know

who are the biggest twats here.

Whether it be Capita management or the self serving, self important councillors, whose only skill is maximising expenses claims.

At the end of the day, there are now 380 employees worried to death that their lives may be about to be shattered thanks to the above mentioned bastards.

Cheer… Ishy

[KittenHuffer]

Re: I don't know

Those 380 are on the Three contract, so I'm afraid you can't blame the c[o*]un[t*]cillors for that particular number.

* delete as applicable

[Anonymous Coward]

Re: I don't know

@KittenHuffer

You are absolutely right. I was wrong to use that number.

But I will stand by my overall sentiment that the councillors that decided to sign contracts with Capita were clueless. Otherwise why are they trying to change the terms now?

Cheers… Ishy

P.S. I am now writing very much tongue in cheek. But KittenHuffer? You have put a picture in my mind that I am trying hard to unsee.

[Little Mouse]

Re: I don't know

"why are they trying to change the terms now?

The clue is probably in the phrase "NINE year contract". Technology marches on - Nobody should be paying top-dollar for services that seemed like good value 5 years ago, but today can be bought off the shelf for pennies. SLA's may also no longer make sense if the time & effort to carry out a task moves from significant to negligible.

Norfolk county Council went down this road back in 2004 - early termination of a 10-year contract with Capita. The adoption of Virtualization meant that paying a hefty chunk of cash for each separate server deployment no longer made sense.

- You want to start regular patching now? That'll cost you more.

- You want your servers deployed in LESS than a week now? That'll cost you more.

And on and on and on, until someone finally threw their hands in the air and decided that enough was enough and gave them the old heave-ho.

[Cuddles]

Re: I don't know

"The clue is probably in the phrase "NINE year contract". Technology marches on"

On top of that, councilors march on. The contract was signed in 2016. The last council elections were in 2017, along with several by-elections since then. You can't blame people for wanting to change the terms now when they may well not have been the ones who agreed to the terms in the first place.

[ElectricPics]

Re: I don't know

Councillors don’t sign contracts. They might approve the general form of the outsourcing, but this is driven from unelected officials, starting with the council CEO.

[N2]

Re: I don't know

...or the self serving, self important councillors, whose only skill is maximising expenses claims.

Seat polishing with their shiny trousered arses, they are quite good at that too.

[SteveTh]

Re: I don't know

I think you are misunderstanding the councillor/officer relationship. Councillors are not subject matter experts, they are 'ordinary' members of the public. Officers are experts who provide advice and then implement decisions made after councillors consider that advice. Of course councillors will occasionally go against officer advice but - aside from Planning, where it's surprisingly common - it's unusual for councillors to simply ignore professional advice. I have seen some terrible, ignorant and self-serving decisions from councils' ICT officers. I have also seen sound technical advice distorted by senior officers, particularly where benefits/savings are deliberately overstated. Councillors are only as good as the advice they receive.

[Terry 6]

Re: I don't know

Outsourcing is a slightly different matter. There are councillors ideologically committed to outsourcing everything they possibly can. They seem to have a religious zealotry that thinks that actually employing staff to do stuff that needs doing is the least efficient way, and that it's always better to have a negotiated, limited, expensive contract with a private company who'll only ever let their staff do what's written on a spreadsheet unless there's an extra fee. And who's calculations were based on using even fewer staff than the council did, at lower pay, which won't get them an adequate, committed or skilled workforce.

So certain are these councillors that centrally employed staff are too expensive/untrustworthy or whatever. They never consider that any failings in the system of having a centrally employed workforce are almost all down to them trying to employ too few staff in the first place. Which is a kick in the teeth to the hordes of dedicated public servants who've been going the extra miles to make sure that schools are cleaned thoroughly, homes repaired properly etc.

And of course the poo strikes against the ventilation system as soon as something goes out of scope, usually the day after the contract is signed. So committed are these people to buying in services that they just assume that a different outsourcer won't be just as bad, so when renewal time comes round....

[Dave314159ggggdffsdds]

Re: I don't know

It isn't ideological councillors, it's executives noticing that they have an excuse to pay themselves more for managing the big outsourcing contracts.

[Terry 6]

Re: I don't know

More like said executives hoping to get well paid jobs with the outsourcing companies.

[Aristotles slow and dimwitted horse]

I'm in one of those 5 council areas mentioned in the story and as an upside I see this as a good thing considering that every year my council tax goes up and the scope of those services, or the actual service it does provides goes down, including some that you now have to actually pay for separately; so any additional cash in the bank should perhaps help with balancing the books (yes, I know... I can dream right?)

The downside is that my local council are well known for being very well self obsessed, opaque, open to persuasion by the highest bidder (especially in terms of land planning) and will do everything and anything to not have to either show their faces to, or actually be accountable or respond to the public they serve - unless they are forced to.

I guess payments and collections, helpdesk and all that sort of Backoffice stuff will now go to the even more cheapest bidder, and will reduce service further than they currently are under Crapita. Oh what a thing to look forward to...

[macjules]

expected savings of £18m in the shared services deal had not come to pass

They employed Capita and they thought they would save money? I suggest that next time they ask Santa Claus or the Easter Bunny to tender for contracts.

[Coastal cutie]

Re: expected savings of £18m in the shared services deal had not come to pass

At least either of those would deliver things on the specified dates, not months later

[Kane]

Re: expected savings of £18m in the shared services deal had not come to pass

"At least either of those would deliver things on the specified dates, not months later"

Guaranteed at least once a year for each one.

[Anonymous Coward]

Interesting choice of words

Having read part way through that story I had to reach for a dictionary and just make sure of the definition of immaterial. 10 million is immaterial or am I reading this wrong ? Or do accountants use a different vocabulary to the rest of us.

[Anonymous Coward]

Re: Interesting choice of words

Of course accountants use different vocabulary to us normal folk. If they used a language we could understand we'd find out just what a fucking mess they make of everything, and how bloody brilliant they are at hiding it.

[Commswonk]

Re: Interesting choice of words

Of course accountants use different vocabulary to us normal folk.

There is a story, possibly apocryphal, about a business that wanted to employ someone in a senior accountancy rôle. At interview each candidate was handed a sheet of figures and asked "what do these figures mean?"

The post was given to the applicant who responded "what would you like them to mean?"

[Mike 137]

Re: Interesting choice of words

"what would you like them to mean?"

Accountant? Or was it an auditor?

[Aussie Doc]

Re: Interesting choice of words

I thought an auditor was just an accountant with a sense of humour?

Or is that an actuary?

[Scott 53]

Re: Interesting choice of words

An actuary is someone who can't handle the cut and thrust of chartered accountancy.

[Ozumo]

Re: Interesting choice of words

At my OH's former financial services employer, an actuary was someone on a consulting contract at £1,000 per day.

[Dave314159ggggdffsdds]

Re: Interesting choice of words

Traditionally, actuaries are said to be people who lack the flamboyance necessary to become auditors...

[Terry 6]

Re: Interesting choice of words

IOW The definition of an actuary is someone who finds accountancy too exciting.

And the difference between an accountant and a computer is that a computer has imagination.

[Juan Inamillion]

Re: Interesting choice of words

I did the same thing so... surely shome mishtake.

[Commswonk]

Oh... Beautiful!

From the article: They aren't the only public-sector organisations struggling to recognise the immense value Capita brings to every contract.

What a truly wonderful way of putting it.

An example of Litotes, IIRC.

[Peter2]

What I don't understand is why Capita manages to hit headlines like this so frequently, and yet keeps winning contracts in the public sector.

You'd have thought that they would have been added to a blacklist a long time ago as being an excessively high risk supplier.

[Commswonk]

You'd have thought that they would have been added to a blacklist a long time ago as being an excessively high risk supplier.

Well, quite. However AIUI those seeking to place a contract with an external supplier of services are not allowed to take past performance into account. Now I know that most people who had discovered that a contractor they had used (builder, gardener, car servicing / repair and so on) was a complete cowboy would go out of their way to avoid that contractor like the plague* next time round but in the world of mirrors that is government it's not so much a case of "once bitten, twice shy" as "would you like to bite me again?"

* With apologies for using a cliché.

[Little Mouse]

Local authorities have a pretty stringent tendering process that is intended to make everything fair and legal and above board, but in reality favours companies such as Capita who can invest considerable effort into ensuring their tender ticks ALL of the required boxes on paper, whilst still being complete bollocks.

[Terry 6]

We all wonder this. And do so every time one of these outsourcers goes round the revolving door. again.

Tender> win contract>fuck-up>tender for another contract> and round it goes.

[Dave314159ggggdffsdds]

They have an awful lot more contracts that dont hit the headlines.

But also because the people who signed the bloody stupid contract with Capita don't want anyone looking too closely at their idiocy.

[Catweazle666]

Brown envelopes?

[Fruit and Nutcase]

Where are the Non Execs?

They need to get one or two Tory MPs or their Spouses to the board and then watch Covid gravy train pour it's largess on the company., No spliffling millions - billions is the new currency

[Just an old bloke]

This all harks back to the days of "Nobody got sacked for buying IBM". The public sector appear to find IT a problem and like all problems they want it gone. The problems start when they get to the contracts, get out clauses? They're in there but camoflaged to make it look like the customer is being protected. What they really need is decent, well staffed IT departments ahow are capable of managing and allocating jobs that are beyond their capablilities to smaller local companies. They should be trusted enough to manage their own budgets and report to the top bods exec, not the bean counters. Employing the likes of Crapita (and PWC, EW et al) means signing up to a bait and switch service, more often than not, the changes are outside the scope of the agreement etc... IT is much easier than it was 20 years back.

[TechHeadToo]

I once worked for Capita, last century, when they were smaller, and relatively new. Their sole ethic was to make the council pay for as much as possible, and do the least possible.

I've watched their corrupt (remember the CEO who had to leave due to a bit of 'bribery' of officials?) greed driven expansion over the years, and can only hope that this may mark a significant fallow period coming up.

[Terry 6]

Having had dealings with these companies over the years the common thread is that they sell a lot less work for a little less money than the council pays. The shortfall between what the council staff did and what the councillors and officers imagined they did was then all a premium priced extra. The outsourcing companies were all very aware that their contract was insufficient, because they had poached good council staff to run things and win contracts. The councillors and council officers otoh always seem(ed) to think that the job they were outsourcing comprised a simple headline task, and hadn't a clue what their staff actually did. X minutes to clean a classroom sounds plenty to people who think the job is just a quick Hoover of the floor and polish the desks. Tell that to the people who are dodging round piles of modelling, dusting heaps of National Curriculum documents abandoned in the corners, Hoovering the alphabet tiles placed where the kids sit in front of the teacher's desk and scraping glue ( and worse) off the surfaces.